Bhupendra Barhat

UG17-30
Aim and Objective
 To study and understand the position of minor as a partner during minority and
on attaining the majority.

Research Questions
 Whether a guardian of a minor can enter into an agreement of partnership on
behalf of minor with any third party?
 Whether or not minor can be made to share the losses of a firm or that they can
only share the profits and not be made liable to share any of the firm’s losses?
 Whether a minor elects to become or not to become a partner on attaining
majority?
 Section 11 of Indian Contract Act 1872. ( who are competent to contract).

 Section 3 of Indian Majority Act 1875.

 Partnership is a product of contract.

 Minor cannot become a partner though he may be admitted to benefits of

partnership.
• Venkideswara Prabhu Ravindranatha Prabhu v. Surrendranatha Prabhu.
 Sharing profit and inspection of account:
A minor admitted to benefits of the partnership has a right receive his agreed share
of the property and of the profits of the firm. Such minor has also the right to have
access to and to inspect and copy any of the account of the firm. [Section 30(2)].

 Cannot conduct business and cannot be declaring insolvent:

A minor cannot take part in the management of the business. A minor has no such
right to take part in business management and he has no such authority to take
decision in firm business. A minor cannot be declared insolvent.

Case- Sanyasi Charan Mandal v. Asutosh Ghose

 Minor is not liable for the acts of the firm:
A minor cannot be responsible for the acts of the firm. A minor is not personally
liable, nor will his separate property be liable for the debts and obligation of the
firm, but his liability is confined only to the extent of his share in the property and

profits of the firm. [Section 30(3)]

 Remedy of such a minor to enforce his rights:

Having been admitted to the benefits of partnership, a minor acquires a quasi-
contractual right to enjoy some benefit. It follows that if he has the right, he ought
to have the remedy to enforce this right. But a minor cannot sue for his share of the
property or profits excepts when he wishes to sever his connection with the firm.
[Section 30(4)].
 Consequences of a minor attaining majority.
On attaining majority, a minor admitted to the benefits of partnership, has two option
open to him that are:
1. He may affirm the partnership and become a partner in the firm, or
2. He may repudiate the partnership and sever his connection with the firm.
If minor affirm the partnership, he need not do anything nor give any notice, and on
the expiry of sixth months, he becomes a partner in the firm.
If minor repudiate the partnership, then in this case repudiation can be made only by
giving a public notice that he has elected not to become a partner in the firm, and not
in any other manner.
 The liabilities of such a minor after he becomes a partner either by his own
election or by his failure to give notice as required.
 When a minor sharer becomes a partner, he becomes personally liable to third
parties as a partner for all obligations incurred by the firm since he was
admitted to the benefits of partnership.
 Goode v. Harrison in this English case it was held that -if such a minor, on
coming of age, neither affirms nor disaffirms the partnership, he is held liable
only for debts incurred by the firm since his majority and is not conclusively
held to ratify obligation contracted during his minority.
A minor is not regarded as a full partner since the guardian has the power to
purport the contract on behalf of the minor, as long as the purpose is governed
by section 30. In the true nature of the benefits, the guardian is entitled to
even refuse them or to choose to accept them. The knowledge of the minor is
not a necessary factor.
CIT (Mys.) v. Shah Mohandas Sadhuram.

If guardian is entitled to sever the minor’s connection with the firm, he must
also be held to be entitled to refuse to accept the benefits of partnership or
agree to accept the benefits of partnership for a further period on terms which
are in accordance with law.
 The meaning of partner defined in section 2(1)(q) of the LLP act, 2008.

 The LLP agreement, being a contract, essentially implies that only a person
competent to enter into a contract can be a party to it.

 A person can engage in LLP either as a normal partner or designated

partner.

 Holding either of position, the minor is required to enter into agreement

with the LLP as well as partners, which is not valid.

 There is no provision in LLP Act about admission of a minor to benefit of

partnership
 Hence, a minor cannot be admitted as a partner in a LLP
A minor can be admitted into the benefits of existing firm with the all others
members. There can be no partnership of minor with one adult member. There
must be at least two major partners before a minor is admitted for the benefits
of the firm.
A minor’s participation should be limited to enjoying rights and should not
extend to responsibilities against liabilities of business.
Thank you